PT Timor seeks foreign markets for 23,000 sedans

JAKARTA (JP): Poor sales in Indonesia are forcing National car maker PT Timor Putra Nasional to look for new markets in Europe, the Middle East, China and Hong Kong for 23,000 Timor sedans.

The president of Timor Putra's distribution arm, Soemitro Soerachmad, said yesterday the cars to be exported would be the remainder of the cars Timor Putra was allowed to import from South Korea last June.

The government licensed Timor Putra to import 45,000 Sephia sedans -- renamed Timor -- from its South Korean joint venture partner, Kia Motors Corp, because it did not yet have a manufacturing plant.

Poor sales have prevented all of the cars from being imported.

"We are currently negotiating with prospective importers on sale terms," Soemitro said.

Soemitro said Timor Putra had sold most of the 18,000 S-515 Timor sedans it had imported.

The permission to import the cars came after the government's decision early last year to grant three-year import duty and luxury tax breaks to a so-called national car, provided its local components reached 20 percent by the end of the first year, 40 percent by the end of the second year and 60 percent by the third year.

Timor Putra -- controlled by President Soeharto's youngest son Hutomo Mandala Putra -- was given the sole right to make such a car.

Japan, the European Union and the United States have brought the Timor car issue to the Geneva-based World Trade Organization's (WTO) dispute settlement body, alleging Indonesia has violated WTO rules.

Automotive analyst Soehari Sargo was quoted by Antara as saying Indonesia's sedan market was concentrated mainly in urban areas, particularly in Greater Jakarta.

Of the 38,000 sedans sold last year, about 65 percent were marketed in Greater Jakarta.

Soehari said Timor should strengthen its distribution networks to market the cars in smaller towns.

Soemitro, who yesterday launched the Timor 16-valve double overhead camshaft injection model, S-515i, said those who wanted to swap their outdated S-515 Timor sedans with the new versions could do so.

He said the value of the old models had depreciated 15 percent.

He said that starting this month, Timor Putra would import 2,000 unassembled units of the new model a month.

Soemitro said the local content of the S-515i was expected to reach 20 percent by October.

He said several local and foreign vendors, including vendors from Malaysia, Australia and Japan, were prepared to support the making of Timor sedans.

The S-515i's off-the-road price is Rp 36.4 million (US$15,166) for solid colors and Rp 36.9 million for metallic colors.

Earlier this year, Timor said it had won more than 25 percent of the sedan market since its sedans went on sale in October.

But last month it lowered its monthly sales target from 4,000 to between 2,500 and 3,000 because of low domestic demand.

Sales plunged to only 980 units in February from 3,300 in January. (pwn)